Goldman's Tech Traders Brace For A Huge Week

As Goldman's TMT specialist Peter Callahan recaps recent market action, the going hasn’t been easy amidst a decidedly more challenging alpha stretch the last few weeks as markets have continued to display the "beach ball under water" effect as indices continue to shake off pressure points and return to the highs (e.g. Gov’t shutdown, China/Tariffs, jobs, valuations, Momentum drawdown, et al). Into the final week of a month which has historically seen poor returns, the Nasdaq is up ~3% in October, set for its 7th straight monthly gain – matching the longest monthly ‘winning’ streak since 2016-2017

As the Goldman tech specialist continues, investor sentiment feels ‘okay’ heading into a big week of Tech earnings (long & constructive, but not overly so after weeks of more defensive trading); around the edges, Callahan senses more interest in finding areas beyond AI Infrastructure to invest in (Cyclicals? Software? Payments? Laggards?) either as a “hedge” (in the event AI has a drawdown) or as a simple diversification tool given red-hot price action in certain areas (memory or semicaps or optical).